Ulster Bank customer gets loan interest written off

A successful legal challenge by an Ulster Bank customer to get the full interest portion of his loan written of could pave the way for a number of similar cases.

A businessman from the west of Ireland, who did not want to be identified because he is appealing the decision, took his case against Ulster Bank on foot of the massive fines imposed on Royal Bank of Scotland (RBS) following its conviction for manipulating the euribor [euro interbank offered rate] index.

Ulster Bank is a wholly owned subsidiary of RBS. The basis of this case was a letter sent by Ulster Bank to the businessman in January 2006 informing him that his loan with the bank had been switched from the PRIME index to euribor index. The index will determine the cost of funding for the bank in any loan agreement.